A contract clause I ignored cost me $4,800 in Detroit last spring

I do commercial lease reviews for small retail tenants, and last March I had a client in Detroit who was about to sign a 5 year lease. The landlord's lawyer included a clause about 'continuous operation' that basically said my client had to keep the store open during all business hours, even if sales tanked. I told my client it was standard, so we didn't fight it. Six months later, a road construction project cut off the block for 3 months, and my client wanted to close on Tuesdays to save on labor. The landlord sent a cease and desist via email, then took the full month's rent as a penalty under that clause. That one sentence in paragraph 14 cost them $4,800 and nearly killed the business. Has anyone else seen these 'continuous operation' clauses used as a weapon by landlords, and how do you get them softened without killing the deal?

2 comments

2 Comments

reesel501mo agoMost Upvoted

Standard my foot. That clause is a loaded gun, and "standard" just means "the landlord's lawyer wrote it." You gotta read every single word like it's a trap, because it is. The fix is adding a "force majeure" or "economic hardship" line that lets them close if sales drop below a certain number, or road work goes on. That changes it from a weapon to something a judge won't laugh at. Your client got stiffed, but at least now you'll never skip that paragraph again. Costly lesson, man.

kellyjones29d ago

Take it from someone who's been in the trenches. That exact clause bit me back in 2019. Storefront on a main drag, road construction hits, foot traffic dies. Landlord said pay up or lose the lease. We tried arguing "implied good faith" and the judge basically shrugged. Force majeure is the magic word, but you gotta spell out what counts, not just say "unforeseen events." Put in a sales floor number, like if monthly receipts drop 30% for three months straight, rent goes to a percentage of sales. Also add a timeline for road work, something like if the city shuts down the street for more than 60 days, tenant can walk with no penalty. @reesel50 is right about reading everything like a trap. I now send every lease to a commercial real estate lawyer before signing, cost me $400 one time and saved me maybe $20k since. That "standard" line is just the starting point for negotiation, never the final word.